The benchmark index for millions of mortgages in Spain, the Euribor, has closed the month of July with a new declinelocated in the 3,526%This reduction, the fourth in a row, is a relief for households with variable-rate mortgages, who will see their monthly payments reduced.
Experts anticipate that this downward trend It will remainwith the Euribor expected to reach 2% in the coming yearsThis news represents a good sign for the Spanish economy, as it could stimulate consumption and investment.
And what does this reduction mean? In practical terms, it means that mortgage payments for people with variable rate loans will begin to fall. gradually reduce. Although the impact will depend on the differential applied by each banking entity, it is estimated that the average monthly reduction could be around 60 euros.
What factors are influencing this drop in the Euribor?
The moderation of the inflation and the lower pressure on interest rates from the European Central Bank are the main factors behind this trend. In addition, expectations of an economic slowdown are also contributing to lower long-term inflation forecasts.
Furthermore, the experts consulted agree that The Euribor will continue its decline in the coming monthsalthough at a more moderate pace. It is estimated that it could reach 2% within two or three years, which would represent a considerable saving for those with long-term mortgages.
The impact on mortgages
Thus, starting from the basis of an average mortgage (140,451 euros to be paid in 23 years)according to data from the National Institute of Statistics for 2023) with a differential of one point, The savings would be 64.8 euros per month and about 777 euros per year.And the trend, according to experts, will continue to decline (barring a new unexpected turn).
Meanwhile, those who have not yet decided to buy may want to wait for rates to drop a bit moreas it can be a key factor when choosing between a fixed or variable mortgage (in addition to mixed mortgages).
Given this situation, experts recommend that those with variable rate mortgages keep informed about the evolution of the Euribor and contact their bank to find out the specific impact on their payment. It is also advisable to review the conditions of your mortgage to assess the possibility of portability to another entity that offers better conditions.
In short, the new drop in the Euribor is excellent news for millions of Spaniards which are seeing the pressure on their household economies ease. However, it is important to remember that interest rate developments are a complex phenomenon and that forecasts may vary depending on a number of factors.
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